UK Nuclear Power Policy

Summary

Nuclear power is the UK's only source of firm, low-carbon baseload electricity. It currently provides roughly 11% of generation (Carbon Brief, full-year 2025) from a fleet that is almost entirely past its original design life. All but one of the existing reactors will close by 2030, creating a capacity gap that new projects cannot fill in time. The government's target is up to 24 GW of new nuclear capacity by 2050 (Civil Nuclear Roadmap, January 2024), delivered through a mix of large-scale plants (Hinkley Point C, Sizewell C), small modular reactors (Rolls-Royce SMR), and advanced modular reactors (X-energy Xe-100 and others).

The central policy problem is financing. Nuclear is cheap to run but extremely expensive and slow to build. Every financing model tried or proposed in the UK is an attempt to solve the same equation: who bears the construction risk, and at what cost of capital?

1. Current Fleet

As of early 2026, the UK has nine operating reactors at four sites, all operated by EDF Energy. Total capacity is approximately 5.9 GW.

Sources: EDF Energy station statuses; Centrica life extension announcement, January 2025; World Nuclear Association UK profile, updated 2025.

Key points: - Hartlepool and Heysham 1 received a one-year life extension in December 2024. Heysham 2 and Torness received a two-year extension at the same time. - Extensions depend on ongoing graphite core inspections. The AGR graphite moderator blocks crack with age; once cracking reaches a threshold, the reactor cannot restart. - Sizewell B is the only pressurised water reactor (PWR) in the fleet. EDF plans to extend its life from 40 to 60 years, matching US practice for similar designs. - When the AGRs close, only Sizewell B will remain. UK nuclear output will drop from ~36 TWh/year (2025) to roughly 9 TWh/year.

2. Hinkley Point C

Two EPR reactors under construction at Hinkley Point in Somerset. When complete, it will be the first new nuclear plant in the UK since Sizewell B (commissioned 1995).

Sources: New Civil Engineer, February 2026; EDF project updates; NAO "Hinkley Point C" report, June 2017; Construction Wave, February 2026.

What went wrong on cost: - The original GBP 18 billion estimate assumed a construction period of roughly 10 years. COVID, Brexit supply-chain disruption, and electromechanical installation productivity have each added delay and cost. - Cost has nearly tripled in nominal terms from the 2016 investment decision. - The CfD means UK consumers bear none of the construction cost overrun directly. EDF and CGN absorb overruns in exchange for the guaranteed strike price once generating. However, consumers pay the strike price for 35 years, and the discounted value of those future payments was estimated at GBP 49.8 billion (2025 assessment).

3. Sizewell C

Two EPR reactors planned for the Sizewell site in Suffolk, adjacent to the operating Sizewell B. Same reactor design as Hinkley Point C, but with a different financing model.

Ownership (as of FID, July 2025):

Source: Wikipedia (Sizewell C); World Nuclear News, July 2025; GOV.UK Sizewell C RAB publications.

The RAB model: - Under RAB, consumers begin paying a levy on electricity bills during construction, not just after the plant is generating. This gives investors revenue certainty from day one of construction, which lowers the cost of capital. - The RAB levy took effect 1 November 2025 at a rate of GBP 3.455/MWh (Energy Advice Hub; LCCC confirmed rate). For a typical household, this adds roughly GBP 1/month during construction. - The logic: at Hinkley, EDF needed a 9% real return to compensate for construction risk. If RAB lowers the required return to, say, 4-5%, the lifetime cost to consumers is significantly lower even though they start paying earlier. - Sizewell C is the first UK nuclear project to use RAB. The model is well-established for water companies and the Thames Tideway Tunnel. - Estimated lifetime saving: GBP 2 billion/year to the electricity system once operating (SZC developer estimate, July 2025).

Cost trajectory: - 2020 estimate: GBP 20 billion - 2025 estimate (FID): GBP 38 billion (2024 prices) - Critics (IEEFA, February 2026) suggest the budget will overrun beyond GBP 40 billion, citing Hinkley precedent.

4. Small Modular Reactors: Rolls-Royce SMR

The UK's selected SMR design. A factory-built 470 MW pressurised water reactor, smaller than the 1,630 MW EPR units at Hinkley/Sizewell but designed for serial production to drive down cost through repetition.

Source: Rolls-Royce SMR press release, November 2025; GOV.UK announcement, November 2025; NucNet, March 2026.

GDA (Generic Design Assessment) progress: - Step 1 completed: April 2022 to April 2023 - Step 2 completed: by August 2024 - Step 3 (detailed assessment) entered: August 2024 - Step 3 target completion: August 2026 (53 months total for the full GDA process)

If Step 3 completes on schedule, Rolls-Royce SMR would receive a Design Acceptance Confirmation (DAC) from ONR and a Statement of Design Acceptability (SoDA) from the Environment Agency. These are prerequisites for a site licence.

Selection process: - Great British Nuclear (now renamed Great British Energy - Nuclear, or GBE-N) ran the SMR technology selection. Rolls-Royce SMR was named as the selected technology in November 2025. - Wylfa was chosen because it is an existing nuclear-licensed site with grid connection, cooling water, and local workforce experience from the decommissioned Wylfa Magnox station.

5. Advanced Modular Reactors (AMRs)

AMRs differ from SMRs by using non-conventional coolants, fuels, or neutron spectrums. They are earlier in development than SMRs.

X-energy / Centrica - Xe-100 at Hartlepool:

Source: Centrica press release, September 2025; X-energy announcement, September 2025; Hartlepool Mail.

Other AMR activity: - Holtec, EDF, and Tritax have proposed SMR capacity at the former Cottam coal-fired power station in Nottinghamshire. - The government published an Advanced Nuclear Framework in February 2026, setting out how privately led AMR and advanced nuclear projects can submit proposals to join a government-assessed pipeline. The pipeline opened 4 March 2026 and remains open on a rolling basis.

Source: GOV.UK Advanced Nuclear Framework, February 2026.

6. Great British Energy - Nuclear (GBE-N)

What it does: - Runs technology selection for new nuclear (selected Rolls-Royce SMR in November 2025) - Manages site selection and preparation (confirmed Wylfa, November 2025) - Assesses and manages the pipeline of advanced nuclear project proposals under the Advanced Nuclear Framework - Coordinates with ONR and the Environment Agency on regulatory processes

The renaming from GBN to GBE-N allowed GBP 2.5 billion from Great British Energy's capitalisation to be channelled to nuclear, which was politically necessary given Labour's manifesto commitment to Great British Energy.

Source: GOV.UK GBE-N "About us" page; The Guardian, June 2025; Wikipedia (Great British Energy - Nuclear).

7. Regulatory Framework

Office for Nuclear Regulation (ONR): - Independent statutory body responsible for nuclear safety, security, safeguards, and transport regulation in Great Britain. - Conducts the Generic Design Assessment (GDA) for new reactor designs before they can be built.

GDA process (three steps):

Total GDA duration: approximately 4 years, though the UK HPR1000 GDA took 5 years.

Outputs: - ONR issues a Design Acceptance Confirmation (DAC) - Environment Agency issues a Statement of Design Acceptability (SoDA) - These are prerequisites for a nuclear site licence application

Environment Agency / Natural Resources Wales: - Assess environmental impact, radioactive waste disposal, water use, and discharge permits - Run their assessment in parallel with ONR's GDA steps

Regulatory reform (2025-2026): - The government published "Building Our Nuclear Nation" in response to the Nuclear Regulatory Review 2025, aiming to accelerate the regulatory process without weakening safety standards. - Nuclear site restrictions were lifted in February 2025 to allow SMR deployment at industrial sites beyond traditional nuclear-licensed locations.

Source: ONR GDA background page; GOV.UK GDA guidance; Rolls-Royce SMR GDA portal; GOV.UK Building Our Nuclear Nation, 2025.

8. Financing Models Compared

The fundamental problem: nuclear plants cost billions upfront, take 10-15 years to build, then generate cheap electricity for 60 years. The cost of capital during construction dominates the lifetime cost. A plant financed at 9% costs roughly twice as much per MWh as the same plant financed at 2%.

CfD Model (Hinkley Point C)

• How it works: Developer builds at own risk. In return, receives a guaranteed strike price per MWh for 35 years. If the market price is below the strike, consumers top up the difference. If above, the developer pays back.
• Who bears construction risk: Developer (EDF/CGN).
• Cost of capital: 9% real (NAO, 2017). High because the developer bears all construction risk.
• Problem: The high cost of capital inflates the strike price, making the electricity expensive for decades. And the developer still overran by tens of billions.
• Advantage: Consumers pay nothing until the plant generates.

RAB Model (Sizewell C)

• How it works: Consumers pay a levy on electricity bills from the start of construction. This gives investors a revenue stream during construction, reducing their risk.
• Who bears construction risk: Shared between investors, consumers (via the levy), and government (as largest shareholder).
• Cost of capital: Expected to be significantly lower than HPC's 9%, though the exact rate is not yet public. Estimates suggest 4-6%.
• Problem: Consumers pay before receiving any electricity. If the project is cancelled or massively delayed, they have paid for nothing.
• Advantage: Lower cost of capital means lower lifetime cost per MWh.
• Precedent: Thames Tideway Tunnel, water companies.

Mankala Model (TBI proposal)

• How it works: A cooperative company is created. Shareholders (e.g. a hyperscaler like Microsoft, plus GB Energy) invest equity. The cooperative builds the nuclear plant using debt financing. Each shareholder receives electricity at cost, in proportion to their equity stake. There is no profit margin - the company exists to supply its owners.
• Who bears construction risk: Shared among the cooperative's shareholders.
• Cost of capital: Low, because the cooperative's debt is backed by creditworthy shareholders (hyperscalers, government) and the electricity is pre-sold.
• Problem: Requires an anchor buyer willing to commit to decades of offtake. Works in Finland (where TVO built Olkiluoto 3 this way for industrial buyers) but untested in the UK.
• Advantage: Aligns nuclear build with AI/data centre demand. Hyperscalers get guaranteed clean power; government gets private capital for nuclear.
• Origin: Finnish electricity sector practice. Proposed for the UK by the Tony Blair Institute in "Revitalising Nuclear" (2025).

Source: TBI "Revitalising Nuclear" report, 2025; TVO Mankala model description.

State Programme (Helm proposal)

• How it works: The government borrows at sovereign rates, creates a state-owned company, and builds nuclear plants directly, contracting out construction and operations.
• Who bears construction risk: The state (and by extension, taxpayers).
• Cost of capital: Government gilt rate, historically 1-3% real. Professor Dieter Helm (Oxford) has argued that Hinkley Point C would have cost roughly half as much if financed at government borrowing rates rather than EDF's 9%.
• Problem: Adds to public debt. Governments face pressure to spend on immediate priorities (health, pensions) rather than infrastructure that pays off after several election cycles. Treasury is resistant.
• Advantage: Lowest possible cost of capital. Used by France (EDF, state-owned, currently building six new reactors) and historically by the UK for its original nuclear fleet.
• Advocate: Professor Dieter Helm, Oxford University.

Source: Dieter Helm, various publications and BBC interviews; Power Technology RAB analysis; Carbon Brief Helm review analysis.

9. Key Data

The capacity gap in plain terms:

Today the UK has roughly 6 GW of nuclear. By 2030, closures will reduce that to about 1.2 GW. Hinkley Point C (3.3 GW) is not expected until 2030-2031. Sizewell C (3.3 GW) is early-to-mid 2030s. Rolls-Royce SMR at Wylfa (1.4 GW) is mid-2030s. Even if all three deliver on time, the UK will have roughly 9 GW of nuclear by the late 2030s - well short of the 24 GW target for 2050. Filling the remaining 15 GW requires additional large plants, a fleet of SMRs, and AMR deployment, none of which have investment decisions yet.

10. Nuclear and AI / Data Centre Demand

Large-scale AI training and inference requires enormous, constant electricity supply. Nuclear is one of the few sources that can provide firm, clean power at the scale data centres need, 24 hours a day, regardless of weather.

US deals setting the pattern:

Source: Procurement Magazine; EIA "Today in Energy"; Introl blog.

UK implications: - The TBI Mankala proposal (Section 8 above) is explicitly designed to link hyperscaler capital to UK nuclear build. A hyperscaler co-invests in an SMR through a Mankala cooperative and receives electricity at cost. - The UK government published plans in January 2025 to use dedicated nuclear plants to establish an AI and data centre ecosystem (NucNet, January 2025). - The Advanced Nuclear Framework (February 2026) is designed partly to attract private and hyperscaler investment into AMR projects. - The X-energy/Centrica Hartlepool AMR proposal (Section 5) could serve industrial and data centre demand as well as grid supply, given the Xe-100's ability to provide both electricity and high-temperature process heat.

The strategic argument: If the UK wants to attract hyperscaler investment in AI infrastructure, it needs to offer firm clean power. The countries that can guarantee gigawatts of clean baseload to data centres will attract the investment. Nuclear is one of very few technologies that can do this. Without it, the UK competes with one hand tied behind its back.

Glossary

• AGR - Advanced Gas-cooled Reactor. UK-designed reactor type from the 1970s-80s. Uses graphite moderator and CO2 coolant. All closing by 2030.
• AMR - Advanced Modular Reactor. Modular reactor using non-conventional coolant, fuel, or neutron spectrum (e.g. high-temperature gas, molten salt).
• CfD - Contract for Difference. A subsidy mechanism where the government guarantees a fixed price per MWh to the generator.
• DAC - Design Acceptance Confirmation. ONR's approval that a reactor design is acceptable for construction in the UK.
• EPR - European Pressurised Reactor. Large PWR design by EDF/Framatome. Used at Hinkley C and Sizewell C. 1,630 MW per unit.
• GBE-N - Great British Energy - Nuclear. The government body responsible for new nuclear delivery. Previously called Great British Nuclear (GBN).
• GDA - Generic Design Assessment. ONR's pre-licensing assessment of reactor designs, taking approximately 4 years.
• PWR - Pressurised Water Reactor. The most common reactor type worldwide. Uses ordinary water as coolant and moderator.
• RAB - Regulated Asset Base. A financing model where consumers begin paying during construction, reducing investor risk and cost of capital.
• SMR - Small Modular Reactor. Generally under 500 MW, designed for factory manufacture and serial deployment.
• SoDA - Statement of Design Acceptability. Environment Agency's equivalent of DAC.
• Strike price - The guaranteed price per MWh a generator receives under a CfD.

Last updated: 25 March 2026 All figures sourced and dated inline. Raw search sources retained for audit.